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EurAnalysis Kindergarten 24 replies

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  • #4,761
  • Oct 24, 2011 1:22am Oct 24, 2011 1:22am
Personally I dont care what the result will be provided in the EU summit later is,II am only trade based on my chart and I think the correction almost over,for the next 2 says looking 1.413 for short
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If there was easy money lying around,no one would be forcing it into your
  • #4,762
  • Oct 24, 2011 1:37am Oct 24, 2011 1:37am
Quoting AaronWard
So, quantitative easing until inflation has reduced the american worker to the level of the Chinese worker. By this time the banks should have so much money that liquidity and capitalization is not a problem. Yes?
We're talking about globalisation, not the American worker. The American worker enjoys a Cold War premium which is no longer necessary whereas there are as yet immature consumer and labour markets in the other 4 billion or so. There is little the American worker has to offer in terms of extractable value...he is at the ceiling of his worth....contrast that with the other as yet undeveloped regions. Why does investment target Asia?

The banks are adequately capitalised. Their problems lie in the debts on their balance sheets...debts from securitised assets that arose in another context. These are fairly significant and short of being written off (which they cannot), will have to be borne by the taxpayer to ensure that the annual accounts of banks can continue to support faith in the financial sector (which is the backbone of the American service economy.)..and which is where liquidity issues fall to be considered.

Edit: Inflation is less of an issue due to the imported deflation from Asia. Capitalising the banks with inputs of easings need not necessarily trigger inflation given America's preeminent role as FDI. Take these two together and I suspect that inflation will be less of a problem. In any case, much of the funding not entering circulation for FDI reasons will be held over by banks in a bid to recoup the lost value on the derivatives.
The road to pipland is arduous and fraught with challenge.
  • #4,763
  • Oct 24, 2011 2:06am Oct 24, 2011 2:06am
Much clearer, Traider. You think about things at a conceptual level that always seems a bit odd to me. But I learn much every time. Many thanks.

Inflation is an issue, for the developing world. Probably at about 8% across the board. What has happened in China is that the demand side for labour is stronger than the supply side. Wages are going up by around 16% a year. And the local currency is also appreciating at about 6-7% a year. Which means the direct labor costs of Chinese goods are going up at around 25% a year. Soon (already) China will be exporting inflation, not deflation to the US.
Kill the ego, or it will kill the mission.
  • #4,764
  • Oct 24, 2011 2:37am Oct 24, 2011 2:37am
Quoting AaronWard
Much clearer, Traider. You think about things at a conceptual level that always seems a bit odd to me. But I learn much every time. Many thanks.

Inflation is an issue, for the developing world. Probably at about 8% across the board. What has happened in China is that the demand side for labour is stronger than the supply side. Wages are going up by around 16% a year. And the local currency is also appreciating at about 6-7% a year. Which means the direct labor costs of Chinese goods are going up at around 25% a year. Soon (already) China...
Yep, that's why foreign investors are running from China at an alarming rate. The days of cheap labor are gone. Not to mention world pressure to allow the Yuan to appreciate.
I have multiple personalities... Bull today Bear tomorrow!
  • #4,765
  • Oct 24, 2011 2:49am Oct 24, 2011 2:49am
Internet is stable again but my nap sure didn't last long.

I'm going to wait out the E$ pair right now. I beleive it's headed higher into some supply zones I'm interested in to short as per my earlier post.

Right now I am long EURAUD She hit a demand zone I have been watching where price rallied very strongly last time here. Entry @ 1.3341, initial stop @ 1.3264 Position sized to 2% of risk capitol. T1 1.3706, T2 1.3958 EURAUD has been rangebound in a 1.3 - 1.4 range for a year.

After 50 pip bounce up from my entry so I moved SL to BE +3. Looks a little weak right now but with no risk, it's time to let it run and see what happens. I'm going to go try to get back to sleep again.


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I don't care which way the market is going as long as it's going my way
  • #4,766
  • Oct 24, 2011 2:56am Oct 24, 2011 2:56am
Good morning all.
I see we have broken 1.39 resistance and also tested the 1.3940/50 resistance.
The power of hopium

I don't see this lasting but what I see doesn't seem to matter lately.
So, here are our possible targets.

1. 1.4011 representing the 61.8% fibo of the big move down from 1.4547 to 1.3144

2. 1.3846 representing the 50.0% fibo of the same move

sigh
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Those who say it cannot be done should not interrupt those who are doing it
  • #4,767
  • Oct 24, 2011 3:00am Oct 24, 2011 3:00am
Quoting The Fool
This information is not made available publically in real-time, or, if it is, I can't find it...
Very interesting post indeed. Especially FED audit by that Senator. Thanks for posting it.

T.
"I know one thing, that I know nothing." Sokrates
  • #4,768
  • Oct 24, 2011 3:00am Oct 24, 2011 3:00am
Good morning everyone.

While the price action today is concerning, since for a time price broke the important 139 psychological threshold, since then price has returned to under 1.39. The chart continues to show a divergent pattern on the RSI and my "line in the sand" RSI trendline remains unbroken. Until it is pierced, I will hold my short in accordance to my rules.
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Observation is the path to discovery.
  • #4,769
  • Oct 24, 2011 3:08am Oct 24, 2011 3:08am
Quoting traider
...Whatever replaces capitalism will not be a return to mercantilism nor will it be any earlier than mid century. What we have and even more (in terms of speculative trading styles of wealth creation) are set to become very much a way of life till then. The Euro crisis is simply the setting for greater globalisation.
What a nice philosophical vision. I like that .
"I know one thing, that I know nothing." Sokrates
  • #4,770
  • Oct 24, 2011 3:13am Oct 24, 2011 3:13am
Quoting Alorente
Good morning everyone.

While the price action today is concerning, since for a time price broke the important 139 psychological threshold, since then price has returned to under 1.39. The chart continues to show a divergent pattern on the RSI and my "line in the sand" RSI trendline remains unbroken. Until it is pierced, I will hold my short in accordance to my rules.
Indeed. I expected it to be only a pullback to 1.39 level, but the price broke down instead. Lost few pips and am waiting for the market to make its mind already...
  • #4,771
  • Oct 24, 2011 3:26am Oct 24, 2011 3:26am
Quoting Blobik
Indeed. I expected it to be only a pullback to 1.39 level, but the price broke down instead. Lost few pips and am waiting for the market to make its mind already...
I feel the market has already made its mind. I am starting to see what could end up being a complete decoupling of the Euro from other risk assets

It's clearly a risk-on day with equities and commodities
http://www.finviz.com/futures_performance.ashx
The Euro is trying to follow along but can't seem to keep up.
Of course it is too early to tell.
Those who say it cannot be done should not interrupt those who are doing it
  • #4,772
  • Oct 24, 2011 3:27am Oct 24, 2011 3:27am
Analyzing the Daily chart, I find several very important factors. Price is now testing the bottom wall of the descending channel it built From May till it broke it in September. Will it reenter the channel? I doubt it greatly.

Another interesting point. The RSI is testing the 58 level it has respected since early June. 58 has been a consistent high for the RSI since the Euro weakend several months ago. A break of this horizontal line (Marked in Red), would clearly indicate real strength returning to the common currency. I severely doubt that this will happen. I think a reversal is imminent.

A third factor pointing to a reversal is the Trix on the THV. It is coming out of a severely overbought condition and the Fast Trix (Thin Line) is crossing the Slow Trix (Thicker Line). This is a loud and clear sell signal according to the THV rules.

I find 0 factors supporting the long view right now.
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Observation is the path to discovery.
  • #4,773
  • Edited 3:41am Oct 24, 2011 3:31am | Edited 3:41am
Quoting PipTrapper
I feel the market has already made its mind. I am starting to see what could end up being a complete decoupling of the Euro from other risk assets

It's clearly a risk-on day with equities and commodities
http://www.finviz.com/futures_performance.ashx
The Euro is trying to follow along but can't seem to keep up.
Of course it is too early to tell.
This is exactly what happened at 1.45

Anyway, the 5 min chart looks like fun for the avowed bear.

EDIT: the 4 hour candle that is currently forming is just about as bearish as they get. But, of course, still time to reverse.
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Kill the ego, or it will kill the mission.
  • #4,774
  • Oct 24, 2011 3:34am Oct 24, 2011 3:34am
Quoting Alorente

I find 0 factors supporting the long view right now.
I see one signal supporting more gains but you will not see it on the charts.
It is called hopium
As for the charts, I believe we need to see a close below 1.38 to cancel any potential move up and I believe we may see that today.
Alternatively, we will see 1.40 before the sell-off.
Those who say it cannot be done should not interrupt those who are doing it
  • #4,775
  • Oct 24, 2011 3:36am Oct 24, 2011 3:36am
Quoting AaronWard
This is exactly what happened at 1.45

Anyway, the 5 min chart looks like fun for the avowed bear.
That is exactly what I was looking at. 1.4547 was a fake head and that is precisely what this is looking like.
Those who say it cannot be done should not interrupt those who are doing it
  • #4,776
  • Oct 24, 2011 3:36am Oct 24, 2011 3:36am
Quoting Alorente
Analyzing the Daily chart, I find several very important factors. Price is now testing the bottom wall of the descending channel it built From May till it broke it in September. Will it reenter the channel? I doubt it greatly.

Another interesting point. The RSI is testing the 58 level it has respected since early June. 58 has been a consistent high for the RSI since the Euro weakend several months ago. A break of this horizontal line (Marked in Red), would clearly indicate real strength returning to the common currency. I severely doubt that this...
By the way, the last time the THV SELL signal was given on the Daily Euro chart was on August 30th of this year, and you can clearly see in the chart I posted what happened immediately after.
Observation is the path to discovery.
  • #4,777
  • Oct 24, 2011 3:44am Oct 24, 2011 3:44am
Quoting Alorente
By the way, the last time the THV SELL signal was given on the Daily Euro chart was on August 8th of this year, and you can clearly see in the chart I posted what happened immediately after.
Yes AaronWard and I just pointed that out.
Also I am still looking at very strong bearish divergence on my daily chart.

.
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  • #4,778
  • Oct 24, 2011 3:53am Oct 24, 2011 3:53am
Quoting PipTrapper
That is exactly what I was looking at. 1.4547 was a fake head and that is precisely what this is looking like.
The other thing... I dont know if you were watching the AM session. But big money was driving it up to 1.395 for the opening of the london session. You can see this quite clearly on the 5 min chart.
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Kill the ego, or it will kill the mission.
  • #4,779
  • Oct 24, 2011 3:53am Oct 24, 2011 3:53am
Here is more support for the short case. On the Daily S&P, which has been moving in tandem with the Euro in recent months, we see that price touched the 61% Fib level and was repelled quickly. The Trix is also coming out of an Extreme Overbought condition and a SELL signal is about to be given as the Fast Trix is getting ready to cross the Slow Trix. Lastly, the RSI is rolling over at the 61 level which has been the ttop for the S&P daily RSI since the drop started on July 22nd.

There are too many factors lining up like ducks in a row here supporting an imminent reversal for it to be denied..
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Observation is the path to discovery.
  • #4,780
  • Oct 24, 2011 3:58am Oct 24, 2011 3:58am
Quoting Alorente
Here is more support for the short case. On the Daily S&P, which has been moving in tandem with the Euro in recent months, we see that price touched the 61% Fib level and was repelled quickly. The Trix is also coming out of an Extreme Overbought condition and a SELL signal is about to be given as the Fast Trix is getting ready to cross the Slow Trix. Lastly, the RSI is rolling over at the 61 level which has been the ttop for the S&P daily RSI since the drop started on July 22nd.

There are too many factors lining up like ducks in a row here supporting...
Those who say it cannot be done should not interrupt those who are doing it
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